EUR 100.00 For Business Accounts Only

IBERIAN DAILY 28 MAY (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: AEDAS HOMES, FERROVIAL, NEINOR HOMES, REDEIA, TALGO.

Debt truce and market rally
The positive trend seen in stock markets in the last few weeks continued, with the Ibex lagging behind slightly. Thus, in the STOXX 600 most sectors ended with gains, led by Technology and Travel&Leisure vs. the slight drops of Construction and Utilities. On the macro side, in the euro zone, May’s economic confidence climbed more than expected although it continues to suggest weak GDP growth. In the US, May’s Conference Board consumer confidence and the Dallas Fed index rose more than expected thanks to the ease of the trade tensions. April’s core capital goods orders and shipments fell more than expected. March’s FHFA home prices dropped, as opposed to expectations. The Trump administration ordered to suspend the student visa processing worldwide while it continues to work on the total privatisation of Fannie Mae and Freddie Mac In US Results, Autozone’s earnings came in below expectations.
What we expect for today
European stock markets would open with slight profit taking of around -0.2%. Currently, S&P futures are down -0.06% (the S&P 500 ended +0.31% higher vs. the European closing bell). Asian markets are rising (China’s CSI 300 +0.10% and Japan’s Nikkei +0.33%).
Today in Germany we will learn the number of unemployed, in the US the Richmond Fed manufacturing index. In US business results, NVIDIA, HP, Salesforce and Agilent Technologies, among others, will release their earnings.


COMPANY NEWS

AEDAS/NEINOR HOMES. Neinor shows interest to aquire Aedas.
Yesterday Neinor made public it is studying the acquisition of Castlelake’s 79% stake in Aedas, which would force it to launch a takeover bid for 100%. According to the press, the reference price is € 25.00/sh. (-11% vs. closing price). The bid could be structured in many ways, with the most likely option outlined by the press being a JV between Apollo and Neinor (with the former controlling the JV) to reinforce Neinor’s co-investment business. We believe that Castlelake will have to choose between a higher valuation but in shares or a lower cash payment. The deal could have a positive impact on Neinor’s NAV/sh. AEDAS UNDERWEIGHT /NEINOR HOMES OVERWEIGHT.